DEFENSE LOGISTICS AGENCY

HEADQUARTERS

 8725 JOHN J. KINGMAN ROAD

FORT BELVOIR, VIRGINIA 22060-6221

April 23, 2018 

MEMORANDUM FOR SUPPLY AND SUPPLY DISCREPANCY REPORT (SDR) PROCESS 

REVIEW COMMITTEE (PRC) MEMBERS

SUBJECT: Approved Defense Logistics Management Standards (DLMS) Change (ADC) 

1273, Supply Discrepancy Report (SDR) Disposition Instructions Authorizing 

Receipt Reversal for Receipts and Associated SDRs Submitted to the Wrong 

Owner and Use of Reason for Reversal Code on Receipt Transaction 

(SDR/MILSTRAP/Supply) 

We are forwarding the attached approved change to DLM 4000.25, Defense Logistics 

Management Standards, and DLM 4000.25-2, Military Standard Transaction Reporting and 

Accountability Procedures (MILSTRAP), for implementation. 

Addressees may direct questions to Mr. Rafael Gonzalez and Mr. Ben Breen, at email: 

DLMSSDR@dla.mil or DLMSSupply@dla.mil. All others must contact their Component 

designated Supply PRC representative available at 

www.dla.mil/HQ/InformationOperations/DLMS/DLMSPrograms/supply/, or SDR PRC 

representative available at www.dla.mil/HQ/InformationOperations/DLMS/DLMSPrograms/sdr. 

HEIDI M. DAVEREDE

Program Manager 

Enterprise Business Standards Office

Attachment

As stated

cc:

ODASD (SCI) 
Attachment, ADC 1273

Page 1

Attachment to ADC 1273

Use of SDR Disposition Instructions Authorizing Receipt Reversal for 

Receipts and Associated SDRs Submitted to the Wrong Owner and Use of 

Reason for Reversal Code on Receipt Transaction

1. ORIGINATING SERVICE/AGENCY AND POC INFORMATION: Ben Breen, DOD 

SDR Alternate, EBSO/DLMS Program Office, email: benjamin.breen@dla.mil

2. FUNCTIONAL AREA:

a. Primary Functional Area: Receiving, SDR

b. Secondary Functional Process: Inventory Accountability

3. REFERENCES:

a. Approved DLMS Change (ADC) 1221, Mandatory SDR for DLA Distribution Center 

Receipts with no Prepositioned Materiel Receipt (PMR), July 29, 2016

b. Defense Logistics Manual (DLM) 4000.25, Defense Logistics Management Standards 

(DLMS), Volume 2, Chapter 13, Materiel Receipt, and Chapter 17, Supply Discrepancy 

Reporting

c. DLM 4000.25-2, Military Standard Transaction Reporting and Accountability 

Procedures (MILSTRAP), Chapter 4, Receipt and Due-in, and Chapter 9, Rejection, Routing, 

and Reversal of Transactions

d. ADC 1102, Army-Directed DLA Distribution Center Shipments, Procedures for 

Discrepant or Unauthorized Returns to the Distribution Centers, and Administrative Updates, 

June 5, 2014

e. Approved Addendum to ADC 1102A, Procedures for Unauthorized/Discrepant Air 

Force Returns to DLA Distribution Centers, April 13, 2015

f. ADC 1160, Procedures for Recommending and Authorizing Credit for Validated 

SDRs, Associated Reply Code Revisions, and Required use of the Reason for Reversal Code in 

Issue Reversals, January 19, 2016
Attachment, ADC 1273

Page 2

4. APPROVED CHANGE(S): Green highlighting identifies substantive changes subsequent 

to staffing.

a. Brief Overview of Change: This change updates DLA Distribution and Component 

procedures to authorize use of the SDR process to request a receipt reversal in response to a 

receipt and associated SDR submitted to the wrong owner. This process only applies to SDRs 

identifying that no matching prepositioned materiel receipt (PMR) was available for the 

shipment and, as a result, the receiving activity inadvertently receipted the materiel to the wrong 

owner account in the DLA Distribution Standard System (DSS). The SDR reply will provide an 

audit trail for the resolution of the discrepant receipt using receipt reversal and reprocessing of 

the receipt and SDR to the correct owner under DLMS/MILSTRAP and SDR procedures. For 

those Components with functionality to reject the receipt reported to the wrong owner, the SDR 

rejection will correlate to the receipt rejection.

b. Background: 

(1) ADC 1221 (Reference 3.a.) established a requirement for DLA Distribution 

Centers to send an SDR to the owner/manager when the distribution center processes a receipt 

without a PMR, for materiel owned by that organization. However, because there is no PMR, 

the receiving activity must follow a series of steps to determine the materiel owner using other 

available information such as the shipping document. However, the DLA Distribution multi-step 

guidance may still result in errors causing the distribution center to direct the receipt and the 

associated SDR to the wrong activity. Under current DLA Distribution guidance, use of receipt 

reversals authorized under DLMS Volume 2, Chapter 13 and MILSTRAP Chapter 9 (Reference 

3.b. and 3.c.) is restricted to a narrow interpretation for selected types of distribution center 

errors. DLA Distribution often requires the current owner to issue a materiel release order 

(MRO) using ship-in-place procedures to change ownership of the materiel when materiel was 

receipted to the wrong owner. This process is time consuming and manually intensive for the 

wrong owner since the MRO and new PMR must be triggered outside normal operations. 

(2) Because the distribution center normally sends missing PMR SDRs as 

informational, the recipient may not take any action on the SDR while pursuing corrective action 

for the inventory. Components need additional guidance to reject SDRs sent to the incorrect 

owner to ensure metrics for missing PMRs align with the correct Component. 

(3) Components returning discrepant/deficient materiel do not always follow all 

related procedures, sometimes due to system constraints. Documented procedural requirements

include returning the materiel on the original document number or the document number 

assigned by the item manager directing the return. The item manager must provide a PMR under 

this document number to ensure proper posting of the receipt to the item manager’s account 

using the correct supply condition code. For Product Quality Deficiency Report (PQDR)-related 

returns, the PMR must include the PQDR report control number (RCN) to facilitate exhibit 

tracking. The returning activity must include the hard-copy SDR annotated as “SDR RETURN” 

on the exterior of the package, or if the materiel is a PQDR exhibit, follow the return instructions 

given by the investigating activity and mark as “PQDR EXHIBIT” on the outside of the package.
Attachment, ADC 1273

Page 3

(4) Compliance with materiel returns procedures, including mandatory use of 

appropriately prepared PMRs and Service enforcement of the MILSTRIP materiel return 

program (MRP) to preclude unauthorized returns, will bring a significant reduction in the volume 

of receipt processing errors. However, there is still a need for more efficient procedures for 

handling receipts posted to the wrong owner account. Current procedures are inefficient and 

misrepresent inventory actions. This change provides documented procedures and authorization 

for the owner to request receipt reversal for an erroneously processed receipt using the SDR 

process. DLA Distribution coordinated this approach for audit readiness compliance and 

received concurrence. 

(5) MILSTRAP authorizes the recipient to reject receipts reported to the wrong 

owner, and identify the correct owner when known, using the DLMS 824R (legacy Document 

Identifier Code (DIC) DZG) with Reject Advice Code AB.

(6) A primary target for use of the receipt reversal under this change will be 

PQDR exhibit receipts posted to the wrong owner due to a missing PMR matching the return 

document number. The receiving activity generates an SDR transaction for PQDR exhibit 

receipts citing SDR Discrepancy Code Q11. When there is no matching PMR, the SDR will also 

include Discrepancy Code Z3. The receiving error is often the result of the customer returning 

the exhibit to the DLA Distribution Center under a customer-assigned document number (rather 

than the document number assigned for the return by the item manager). Using the returning 

activity assigned document number causes the distribution center to be unable to locate the PMR 

(when provided) and process the receipt to the same Service as the returning activity regardless 

of intent.

(7) DLA Distribution Centers report consumable item returns (receipts and 

associated SDRs) as unauthorized returns when there is no PMR and incomplete or missing 

documentation make it impossible to verify the intended owner. Under ADC 1102/1102A

(Reference 3.d. and 3.e.), these are reported to the item manager except when a predesignated 

Service owner has been established. Use of a pre-designated Service owner reduces the volume 

of unauthorized consumable item returns receipted to DLA.

c. Approved Change in Detail: Revise DLMS guidance to update procedures for 

handling SDRs for receipts erroneously posted to the wrong owner for which receipt rejection is 

not an available course of action. New procedures for SDR rejection with a receipt reversal 

request apply only in response to an SDR indicating a missing/unmatched PMR (Discrepancy 

Code Z3) (regardless of other discrepancy codes cited). These procedures do not authorize the 

Service to circumvent existing procedures by using receipt rejection/reversal for unauthorized 

consumable item returns that are receipted to the predesignated Service owner under ADC 

1102/1102A.

(1) The SDR recipient (wrong owner) will reject the SDR using the following 

two reply codes. A new reply code will be established to clearly direct the desired distribution 

center action and facilitate tracking/metrics. (SDR reply code additions and revisions are shown 

in red bold italics.)

612 Reverse associated receipt and reprocess to correct owner as identified.
Attachment, ADC 1273

Page 4

901 Transaction rejected. Discrepancy report submitted to wrong source of supply

activity. Resubmit to the correct action activity (identified in remarks when 

known). When applicable, use with Reply Code 612 or receipt rejection 

transaction (DLMS 824R/MILSTRAP DZG) to reverse/reject the original 

receipt for reprocessing.

(2) When known, the wrong owner will identify the correct owner in the SDR 

reply remarks to support reprocessing of the receipt and SDR. It may require coordination with 

the shipping activity or other relevant parties to confirm intent. If the wrong owner fails to 

provide correct owner identification, the distribution center will follow standard DLA 

Distribution guidance for receipt processing to reprocess the rejected/reversed original receipt. 

ADC 1102/1102A also provides procedures that DLA Distribution Centers may use when 

reporting receipts for unauthorized returns of consumable items.

(3) DLA Distribution guidance and DLA Distribution Standard System (DSS) 

will recognize the Reply Code 612 on the rejected SDR to trigger action for receipt reversal and 

creation of a new receipt and SDR (Document Type 8 under new distribution center-assigned 

control number) to the correct owner. No further action on the original SDR is required since 

the originally designated owner rejected this SDR.

Staffing Note: DLA Distribution will review this requirement for (1) potential programmatic 

logic that could be introduced in DSS to support the requested receipt reversal and new SDR 

creation, and (2) ensure that no further DSS action is needed to close the rejected SDR without 

an additional outgoing transaction on the original control number.

(4) Revise DLMS/MILSTRAP guidance to support receipt reversal when the 

missing PMR SDR reply documents erroneous processing of the receipt. 

(5) Establish a new reason for reversal code to tie the reversal for a receipt 

transaction sent to the wrong owner, to the SDR requested action. Expand the use of existing 

Reason for Reversal Code T (Other) for use on the receipt transaction. (Reason for reversal code 

additions and revisions are shown in red bold italics.)
Attachment, ADC 1273

Page 5

CODE NAME/DEFINITION APPLICABLE 

TRANSACTION EXPLANATION

R Reversal of receipt –

wrong owner

527R Receipt/

D4_/D6_

Reversal of receipt erroneously

reported to wrong owner due to 

missing/unmatched pre-positioned 

materiel receipt (PMR). [May be

associated supply discrepancy report 

(SDR) reply disposition requesting

reversal and reprocessing of receipt to 

the correct owner.]

1

T Reversal of issue

transaction - other

527R Receipt/

D4_/D6_

867I Issue/D7_

Reversal of transaction for a reason not 

otherwise identified, inclusive of 

incorrectly entered data, (e.g., 

transposed characters). 2

1 Refer to ADC 1273.

2 Refer to ADC 1160 and ADC 1273.

(6) WebSDR will segregate rejected SDRs in the WebSDR-generated 

management report for missing PMR so the rejected SDRs are not grouped with valid SDRs. 

Rejected SDRs include SDRs with reply codes in the 700, 800, or 900-series (with exception of 

Reply Code 716 and 936).

Staffing Note about Reply Codes: 

1. A future DLMS change will remove authorization to use Reply Code 716 (SDR recorded for 

information and possible corrective action) in favor of the equivalent code in the correct code 

series (Reply Code 144). The SDR Administrators agreed to delay removal of Reply Code 716 

because this action will require significant system changes to the DLA Enterprise Business 

System (EBS) to accomplish SDR closure under the correct code.

2. Reply Code 936 does not apply in this situation. It is used to suspend an SDR reply while 

awaiting an information copy of the original SDR.

d. Revisions to DLM 4000.25 Manuals:

(1) Revise DLM 4000.25, Volume 2, Chapter 13, Materiel Receipt, and Chapter 

17, Supply Discrepancy Reporting, as shown in Enclosure 2.

(2) Update DLMS Volume 2 Appendix 7.28, Supply Discrepancy Report 

Relevant Data Elements, for new and revised discrepancy codes as shown in paragraph 4.c.(1).

(3) Update DLMS Volume 2 Appendix 7.32, Reason for Reversal Code, for new 

code value as shown in paragraph 4.c.(5). 

(4) Revise DLM 4000.25-2, MILSTRAP, as shown in Enclosure 3.

e. Transaction Flow: Standard receipt/receipt reversal and SDR transaction flows 

apply.
Attachment, ADC 1273

Page 6

f. Alternatives: None identified.

5. REASON FOR CHANGES:

a. The current process for handling erroneous receipts is time-consuming and inefficient. 

It misrepresents inventory/issue volume since the materiel transferred to the correct owner using 

the ship-in-place process never truly belonged to the wrong owner.

b. The current process does not have an audit trail correlating the original receipt with 

the ship-in-place MRO. Expanded use of the reason for reversal code to support audit history is 

consistent with use of this data element under ADC 1160 (Reference 3.f.).

6. ADVANTAGES AND DISADVANTAGES:

a. Advantages: 

(1) Provides an efficient approach for handling erroneous receipts that DLA 

Distribution can apply consistently across all DLA Distribution Centers.

(2) Provides a transactional audit trail from original receipt through re-processing 

to the correct owner using the SDR when receipt rejection using DLMS 824R (legacy Document 

Identifier Code (DIC) DZG) by the wrong owner is not systemically available.

(3) Supports DLA senior management direction to reduce/improve manual effort 

through automation.

b. Disadvantages: None identified.

7. ADDITIONAL COMMENTS TO CONSIDER:

a. Use of the SDR to request receipt reversal may be used pending automation of DLMS 

824R Reject Advice for receipt rejection.

b. If both the receipt and SDR fail because the recipients materiel master does not 

recognize the stock number, responding activities can use WebSDR to generate a transactional 

record of the SDR rejection and request for receipt reversal to maintain visibility and an audit 

trail.

8. ADDITIONAL FUNCTIONAL REQUIREMENTS: Components must identify system 

constraints preventing reuse of the original document or the item manager assigned document 

number for directed discrepant/deficient materiel returns. The item manager establishes a due-in 

for this materiel and provides a PMR to the receiving distribution center. If the customer does 

not return materiel on the expected document number to the expected location, accountability for 

the returned materiel is at risk and a substantial effort may be required to locate and take 

corrective action. The procedures identified in this change will not apply if the Component 

establishes a new document number in conjunction with their own PMR retaining ownership of 

the materiel. The distribution center is not authorized to reverse a receipt that was properly 

recorded based upon a PMR.
Attachment, ADC 1273

Page 7

9. ESTIMATED TIME LINE/IMPLEMENTATION TARGET: Joint implementation of 

updated SDR reply codes and revised procedures will be available for use June 1, 2018. 

Revisions to the no PMR report to isolate rejected SDRs is targeted for completion by July 2018. 

The new reason for reversal code is approved for staggered implementation no later than 

December 2019 for DLMS compliance.

10. ESTIMATED SAVINGS/COST AVOIDANCE ASSOCIATED WITH 

IMPLEMENTATION OF THIS CHANGE: Not available. 

11. IMPACT:

a. New DLMS Data Elements: None identified.

b. Changes to DLMS Data Elements: SDR reply codes and reason for reversal codes 

updated as shown above.

c. Automated Information Systems (AIS):

(1) Revise SDR applications for revised SDR reply code list.

(2) Modify DSS to prompt the user (to the degree feasible) to generate a new 

SDR in response to receipt reversal/reprocessing subsequent to SDR rejection containing Reply 

Codes 612 and 901.

(3) Implement reason for reversal codes on DLMS 527R Receipt (1/BR02/020 

Transaction Type Code D4) (no impact to legacy DIC D4_/D6_ receipt).

d. Defense Automatic Addressing System (DAAS): 

(1) Update DAAS maps for reason for reversal code on DLMS 527R (this data 

element is not applicable to legacy DIC D4_/D6_ receipts).

(2) Update WebSDR tables for revised SDR reply code list.

(3) Modify “No PMR” report to segregate rejected SDRs from those that are 

valid. Accomplish this by creating a separate tab on the current report. 

e. Non-DLM 4000.25 Series Publications: DOD Components may need to update 

internal operating procedures and other published Receipt/SDR guidance.

12. PROPOSED DLMS CHANGE (PDC) 1273 STAFFING RESPONSE/COMMENT 

RESOLUTION:

Originator Response/Comment Disposition

1. Army Concur Noted.

2. Navy Concur with comments.

Concerns:

Noted.
Attachment, ADC 1273

Page 8

Originator Response/Comment Disposition

1. PMR is not automatically generated when an 

SDR is returned under the same doc# under which 

it was received. Therefore, PMR will never be 

generated for material directed for return. 

NAVSUP WSS SDR policy requires that SDRdirected returns are to be shipped under the same 

doc# under which the material was received. 

Supply Planners do not assign a new doc# for the 

return (as indicated in paragraph 5 of PDC 1273).

2. NAVSUP WSS does not want SDRs to be 

rejected due to lack of PMR. NAVSUP WSS 

wants a receipt processed under the doc# under 

which material was received, regardless of whether 

or not PMR was received. 

On April 4th, 2018 a meeting was held 

between NAVSUP and the Enterprise 

Business

Standards Office to further discuss PDC 

1273. The details provided in the

conversation from EBSO addressed the 

Navy's concerns and the Navy is 

comfortable

with moving forward with concurrence.

3. Air Force Concur Noted.

4. Marine Corps Concur Noted.

5. USTRANSCOM Abstain Noted.

6. DLA Concur Noted.
Enclosure 1, ADC 1273

Page 1

Enclosure 1, DLMS Implementation Convention Revision

# Location DLMS 527R Receipt Reason

1. DLMS 

Introductory 

Notes

Add ADC 1273 to DLMS Introductory Notes: 

- ADC 1273, SDR Disposition Instructions Authorizing 

Receipt Reversal for Receipts and SDRs Submitted to 

the Wrong Owner and Use of Reason for Reversal Code 

on Receipt Transaction

Identifies

DLMS Change

included in 

DLMS IC.

2. 2/LQ01/130 Add Code RRC and associated DLMS notes:

RRC Reason for Reversal Code

DLMS Note:

1. Use for the Reason for Reversal Code in receipt 

transactions.

2. By DLMS enhancement, DLA storage activities must 

cite the Reason for Reversal Code on receipt reversals 

associated with an SDR directing reversal of a receipt 

reported to the wrong owner. Refer to ADC 1273.

3. Code RRC (Reason for Reversal Code) is a migration

code. A code maintenance request was approved in 

Version 5050. 

New requirement 

supports full audit trail. 

Delayed 

implementation 

authorized. 

Components should 

consider implementing 

this requirement in 

association with ADC 

1160.
Enclosure 2, ADC 1273

Page 1

Enclosure 2, Defense Logistics Manual (DLM) 4000.25, Volume 2, Revisions

Revise Chapters 13 and 17 as shown. Changes are identified in red bold italics. 

A. Chapter 13, Materiel Receipt

“C13.2.2. Reversal of Incorrect Receipt Transactions. Receiving activities may use the 

Receipt transaction to reverse incorrect Receipt Transactions. Include the reason for reversal 

code as applicable. Refer to Chapter 17 SDR procedures for use of the SDR reply to request 

receipt reversal by the receiving activity when the wrong owner does not have systemic support 

to reject a receipt reported to the wrong owner. 1

C13.2.3. Rejection of Receipt Reported to Wrong Owner. If a receipt is erroneously 

reported to the wrong owner (e.g., due to missing or unmatched PMR), the recipient of the 

receipt transaction should reject the receipt back to the initiator using DLMS 824R Reject 

Advice with Reject Advice Code AB (Rejected. Submitted to incorrect manager). If known, 

include the correct manager to facilitate reprocessing of the receipt. Do not reject receipts 

reported to the owner designated by PMR or to the pre-designated Service owner for 

unauthorized return of consumable items.2 ”

(Renumber subsequent paragraphs)

_____________________

1 Refer to ADC 1273.

2 Ibid .

B. Chapter 17, Supply Discrepancy Reporting 

C17.3.4.2. Unauthorized Returns (no PMR/incomplete or missing documentation/no 

identified owner).1 Refer to paragraph C17.3.6. Distribution Center Receipt with no Due 

In/Prepositioned Materiel Receipt. Discrepancy reports for distribution center receipts of 

unauthorized materiel returns with insufficient information to determine the appropriate owner

will be routed under MILSTRAP for receipt reporting:

(Intervening text not shown)

“C17.3.6. Distribution Center Receipt with no Due In/Prepositioned Materiel Receipt 

(PMR). DLA Distribution Centers will report receipt of unscheduled materiel from new 

procurement and non-procurement sources to the owner/manager, regardless of condition of 

materiel, as a discrepancy. When a PMR is not available, the receiving activity will report the 

receipt using documentation, packaging, and other information, as available. DLA 

Distribution Centers will prepare an SDR to report the missing/unmatched of a PMR to the 

owner/manager as the only discrepancy or in combination with other identified discrepancies. 

The distribution center will identify the SDR as informational or otherwise indicate requested 

 1 Refer to ADC 1102/1102A.
Enclosure 2, ADC 1273

Page 2

action. If the distribution center erroneously reported the receipt to the wrong owner due to 

missing/unmatched PMR, the wrong owner will use the SDR reply process to reject the SDR

(using Reply Codes 901). If the wrong owner is unable to reject the receipt transaction 

systemically, the wrong owner will also request that the distribution center reverse the receipt 

(using Reply Codes 612). If known, the wrong owner should identify the correct owner in the 

receipt rejection or SDR reply to facilitate reprocessing of the receipt. These procedures do not 

authorize rejection/reversal of receipts reported to the owner designated by PMR or the predesignated Service owner for unauthorized return of consumable items.

2

 

 2 Refer to ADC 1273.
Enclosure 3, ADC 1273

Page 1

Enclosure 3, DLM 4000.25-2 MILSTRAP

Revise Chapters 4 and 9 as shown. Changes are identified in red bold italics. 

A. Chapter 4. Receipt and Due-In

“C4.4. Receiving Activity Actions. 1 Receiving activities will:

C4.4.1. Post receipts to the total item property record by changing or adding to data 

in the PMR file or by extracting data from the consignment documentation.

C4.4.2. For discrepant shipments, follow specific guidelines provided in this chapter.

C4.5. Reversal of Incorrect Receipt Transactions.

2 Receiving activities may use the 

Receipt transaction to reverse incorrect Receipt transactions. Refer to DLM 4000.25, Vol 2, 

Chapter 17, SDR procedures for use of the SDR reply to request receipt reversal by the 

receiving activity when the wrong owner does not have systemic support to reject a receipt 

reported to the wrong owner.

C4.6. Rejection of Receipt Reported to Wrong Owner. 3 If a receipt is erroneously 

reported to the wrong owner (e.g., due to missing or unmatched PMR), the recipient of the 

receipt transaction should reject the receipt back to the initiator using DIC DZG Transaction 

Reject with Reject Advice Code AB (Rejected. Submitted to incorrect manager). If known, 

include the correct manager to facilitate reprocessing of the receipt. Do not reject receipts 

reported to the owner designated by PMR or to the pre-designated Service owner for 

unauthorized return of consumable items.”

(Renumber subsequent paragraphs)

B. Chapter 9. Rejection, Routing and Reversal of Transactions

C9.4. TRANSACTION REVERSAL. Table C9.T1 identifies MILSTRAP transactions 

authorized for reversal. The DLMS implementation conventions (ICs) for the corresponding 

functionality are also authorized for reversal. Where applicable, specific procedures related to 

the authorized use of a reversal transaction are included with the relevant chapter narrative. 

C9.4.1. See Chapter 3 for specific procedures and controls required when reversing Issue 

transactions.

C9.4.2. See Chapter 4 for specific procedures for reversal of receipt transactions. 

C9.4.3. See Chapter 7 for specific procedures and controls required when reversing 

Inventory Adjustment (Physical Inventory) transactions, DIC D8A/D9A.”